Ethereum (ETH) price has seen a rapid decline on February 2 with it dipping as low as $2,118 in a broader sell-off followed by Donald Trump’s new tariff plan announcement.
This sudden drop in ETH price has created various speculations in the crypto space. The major downtrend came just after ETH price started to accelerate with a bullish momentum and broke above $3,400 on 31st January.
Data from Coinglass indicates that this recent price cascade led to around $600 million in liquidation of ETH long and short positions. Additionally, there is around a 20% drop in open interest in ETH future contracts, which shows drastic decrease in trader confidence and reduced market activities.
However, ETH has managed to spike over 26% from the low of $2,100 and it is currently trading at around $2,605 – as per Coinmarketcap data. This recovery highlights ETH’s ability to rebound and sustain key support levels, which will be crucial to decide its next movement.
A crypto analyst on X posted that “ETH must hold above $2,700 to keep the bullish structure intact and have a chance of reaching $7,000!”. This post indicates that if ETH fails to sustain this level then it may lead to further declines which puts more selling pressure and loosen the market sentiments.
The broader crypto market currently remains highly volatile and it is expected to be throughout the week. Several analysts and traders are suggesting to not trade crypto assets with high leverage at the time while waiting for the market to cool down until next week.
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